10.3. SR 10-07-2013 City of
Elk Request for Action
River
To Item Number
Mayor and City Council 10.3
Agenda Section Meeting Date Prepared by
Worksession October 7, 2013 Tim Simon, Finance Director
Item Description Reviewed by
Biennial Budget Discussion Cal Portner, City Administrator
Reviewed by
Action Requested
Discuss biennial budget and process.
Background/Discussion
The city has a long-standing tradition of multi-year financial planning which has contributed to Standard
and Poor's "strong" rating on the city's financial management practices,their highest level. Multi-year
financial planning could correlate into multi-year budgeting. Many cities adopt a multi-year or biennial
budget,including Brooklyn Park, Shoreview, Eden Prairie, and Plymouth. City Administrator, Cal
Portner has worked in Brooklyn Park and Plymouth and will be able to share his insights.
The Government Finance Officers Association (GFOA) describes a multi-year budget as a document
that details and plans appropriations and revenues for two or more years. Once a two-year budget is
approved,the off year has minor adjustments to reflect changes in fiscal condition, revenue, and
expenditure adjustments. Since state law requires annual approval of the tax levy and budget every year,
we would still do that process in addition to any budget adjustments. City staff continually works on
multi-year plans for the budget and Capital Improvement Plan (CIP), so other than first year
implementation and updating spreadsheets it could go rather smoothly.
Brooklyn Park and Eden Prairie were asked for some of the pros and cons of a multi-year budget and
below are the summarized responses:
Pros.
• Staff time savings as the GFOA budget award document is compiled every other year.
• Helps with long-term planning,looking out two years instead of one.
• Brings multi-year plans into goals and the budget document.
• Can concentrate on strategic planning and the CIP in the off year.
• Can move expenses between years to accomplish goals or moderate cost increases in a particular
year.
• Council can discuss timing on personnel and service levels over multiple years.
• Strongly supported by bond rating companies.
Cons.
• Develops reasonable assumptions for the forecast years (conservative forecasts).
• Continued education during the first years of implementation.
P a w E A E U s r
NaA f RE]
• Departments led to plan ahead for personnel and technology (we already do this).
• Still need to complete the final process every year due to requirement to set levy and budget
annually.
• If economic circumstances change,more substantial budget work could be needed in off year.
Financial Impact
N/A
Attachments
■ Summary sheet from Eden Prairie two-year budget
N:APublic Bodies\Agenda Packets\10-07-2013\Final\x10.3 sr Biennial budgeting.docx
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2010 2011 2012 2013
Actual Budget Budget % Change Budget % Change
Revenues By Source
Taxes $ 31,581,934 $ 31,072,718 $ 31,895,371 2.6% $ 33,267,865 4.3%
Assessments 347,652 27,583 28,000 1,5% 28,000 0.0%
Licenses and Permits 2,366,157 1,628,160 1,920,125 17.9% 1,920,245 0.0%
Intergovernmental Revenue 1,122,980 1,011,999 988,302 (2,3%) 988,302 0,0%
Charges for Set-vices 40,442,924 42,266,093 44,905,515 6.2% 46,768,544 4.1%
Fines and Penalties 496,074 463,330 455,000 (1,8%) 455,000 0.0%
Investment Earnings 322,609 257,950 257,950 0.0% 282,950 9,7%
Other Revenue 3,897,327 2,484,967 2,483,700 (0.1%) 2,467,099 (0,7%)
Other Financing Sources 3,220,127 1,275,525 1,597,657 25,3% 1,642,753 2,8%
Total $ 83,797,784 $ 80,488,325 $ 84,531,620 5.0% 87,820,758 3.9%
Expenditures(Expenses)by Department
Administration $ 3,503,883 $ 3,697,007 $ 3,796,672 2.7% $ 3,772,540 (0.6%)
Community Development 1,983,414 2,062,280 2,070,654 0.4% 2,125,465 2.6%
Parks and Recreation 9,209,161 8,945,157 9,430,081 5.4% 9,632,723 2,1%
Police 11,678,049 11,827,341 12,394,493 4.8% 12,760,752 3,0%
Fire 4,996,258 4,918,816 5,001,697 1.7% 5,209,376 4,2%
Public Works 5,133,978 5,308,013 5,404,827 1,8% 5,563,829 2.9%
Capital Outlay 2,556,545 2,280,699 2,896,750 27.0% 3,679,900 27.0%
Utilities 16,018,935 17,039,855 17,130,195 0,5% 17,227,827 0.6%
Internal Service 14,750,310 15,066,879 15,554,701 3.2% 16,194,199 4.1%
Liquor Operations 10,517,801 10,912,896 11,247,219 3.1% 11,578,392 2.9%
Debt Service 3,475,573 3,430,724 3,031,100 (11.6%) 3,406,100 12,4%
Other 3,004,370 1,275,525 1,297,857 1.8% 1,334,211 2.8%
Total $ 86,828,277 $ 86,765,192 89,256,246 2.9% $ 92,485,314 3.6%
Expenditures(Expenses)by Object
Personal Services $ 32,123,627 $ 32,169,094 $ 33,733,381 4.9% $ 34,861,175 3.3%
Contractual S ervices 16,633,511 18,262,737 18,065,892 (1.1%) 18,348,659 1.6%
Supplies 4,273,859 4,331,602 4,701,690 8.5% 4,869,445 3.6%
User Charges 9,107,916 9,209,386 9,707,661 5,4% 9,951,884 2.5%
Capital Outlay 2,556,544 2,280,699 2,811,250 23.3% 3,518,400 25.2%
Depreciation 5,860,850 6,512,519 6,572,454 0.9% 6,586,631 0.2%
Cost of Goods Sold 8,610,550 8,868,866 9,134,921 3.0% 9,408,969 3,0%
Debt Service 3,475,576 3,475,764 3,071,140 (11.6%) 3,446,140 12.2%
Other 4,185,844 1,654,525 1,457,857 (11.9%) 1,494,011 2.5%
Total $ 86,828,277 $ 86,765,192 $ 89,256,246 2.9% $ 92,485,314 3.6%
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